SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

United Community Banks, Inc.

(Exact name of registrant as specified in its charter)

Georgia		No. 0-21656		No. 58-180-7304
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

63 Highway 515, P.O. Box 398
Blairsville, Georgia 30512

Registrant’s telephone number, including area code: (706) 781-2265

Not applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

	o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

 

 

Item 2.02		Results of Operation and Financial Condition

			On January 23, 2008, United Community Banks, Inc. (the “Registrant”) issued a news release announcing its financial results for the quarter ended December 31, 2007 (the “News Release”). The News Release, including financial schedules, is attached as Exhibit 99.1 to this report. In connection with issuing the News Release, on January 23, 2008 at 11:00 a.m. EST, the Registrant intends to hold a conference call/webcast to discuss the News Release.
			The presentation of the Registrant’s financial results included net operating income, which is a measure of performance determined by methods other than in accordance with generally accepted accounting principles, or GAAP. Management included non-GAAP net operating income because it believes it is useful for evaluating the Registrant’s operations and performance over periods of time, and uses net operating income in managing and evaluating the Registrant’s business and intends to use it in discussions about the Registrant’s operations and performance. Net operating income excludes the pre-tax effect of the special $15 million fraud related provision for loan losses recorded in the second quarter of 2007 and an additional $3 million special provision for loan losses recorded in the fourth quarter of 2007 because management feels that the events leading to the taking of the special provisions were isolated, non-recurring events and do not reflect overall trends in the Registrant’s earnings. Management believes this non-GAAP net operating income may provides users of the Registrant’s financial information with a meaningful measure for assessing the Registrant’s financial results and comparing those financial results to prior periods.
			Net operating income should be viewed in addition to, and not as an alternative or substitute for, the Registrant’s reported net income determined in accordance with GAAP, and is not necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Item 9.01		Financial Statements and Exhibits

	(a)		Financial statements: None
	(b)		Pro forma financial information: None
	(c)		Exhibits:

99.1

Press Release, dated January 23, 2008

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 99.1

For Immediate Release

For more information:
Rex S. Schuette
Chief Financial Officer
(706) 781-2266
Rex_Schuette@ucbi.com

UNITED COMMUNITY BANKS, INC. REPORTS
DILUTED OPERATING EARNINGS PER SHARE OF 13 CENTS
FOR FOURTH QUARTER 2007

HIGHLIGHTS:

•

Fourth Quarter Operating Earnings

	o		Diluted operating earnings per share of 13 cents, lowered significantly by $26.5 million provision for loan losses
	o		Non-performing assets slightly above third quarter level

BLAIRSVILLE, GA, January 23, 2008 – United Community Banks, Inc. (NASDAQ: UCBI) today announced diluted operating earnings per share of 13 cents for the fourth quarter of 2007, compared to 44 cents for the fourth quarter of 2006. Total revenue on a taxable equivalent basis was $59.3 million for the quarter, compared to $72.1 million for the fourth quarter of 2006. These decreases reflect a higher provision for loan losses in the fourth quarter of 2007 and reflect a more challenging credit environment.

Net operating income was $6.0 million, compared with $18.4 million in the fourth quarter of 2006. Operating return on tangible equity was 5.06 percent and operating return on assets was .29 percent for the fourth quarter of 2007, compared with 17.49 percent and 1.10 percent a year ago, respectively.

“The residential housing market continued to weaken in the fourth quarter, making it one of the most challenging quarters we have faced in recent years,” said Jimmy Tallent, president and chief executive officer. “In response to the difficult operating environment, we worked aggressively to move non-performing loans and assets out of the bank, taking charge-offs and write downs when necessary.”

For the full year, diluted operating earnings per share was $1.48, compared with $1.66 for 2006. Taxable equivalent operating revenue was up 10 percent to $299.5 million versus $272.4 million for 2006, despite the increase in the provision for loan losses. Net operating income for 2007 was $69.0 million compared with $68.8 million for 2006.

Earnings measures for the fourth quarter and full year of 2007 are presented on an operating basis that excludes a second quarter $15 million special provision for loan losses related to two failed residential real estate developments near Spruce Pine, North Carolina. An additional $3 million special provision for loan losses related to these developments was recorded in the fourth quarter of 2007, bringing the total for the year to $18 million. Because the provision was the result of a fraud-related matter that is considered isolated and non-recurring, management believes the presentation of operating earnings is useful for understanding underlying core earnings and credit trends.

Loans were up $553 million from the end of 2006, due primarily to loans added through the acquisition of First Bank of the South in the second quarter. Excluding acquisitions, loans were flat year-over-year. “In 2007, residential construction loan growth slowed substantially due to the weak housing market, particularly in the Atlanta region,” Tallent said. “The weak housing market reduced our ability to grow and we expect that this slower-than-normal loan growth will continue until the market stabilizes. In fact, on a linked-quarter basis residential construction loans were down $110 million. However, on the positive side, we saw $90 million loan growth in the commercial and residential mortgage portfolios. So we are getting growth across our markets, but this growth is more than offset by construction paydowns. To enhance the growth and diversity of our loan portfolio, we are actively exploring opportunities to add commercial

lending expertise and to expand small business lending. We are targeting core loan growth for 2008 to be flat to 4 percent, but expect to be at the low end of that range for the first half.”

Deposits increased $303 million, or 5 percent, from a year ago due to the acquisition of First Bank of the South. “Total deposits, excluding acquired deposits, decreased by $265 million from the prior year as we let non-relationship time deposits run off in view of declining loan demand,” commented Tallent. “Excluding these time deposits, customer deposits were up $25 million from the prior year, but down $77 million from the third quarter.”

“We believe the fourth quarter decline was temporary and directly related to the current economic environment,” said Tallent. “The number of customer relationships continues to increase and our customer satisfaction scores remain at historical highs. In fact, in November we hit a record high of 95.3 percent, proof that our bankers remain focused on the all-important business of taking excellent care of customers.”

For the fourth quarter 2007, taxable equivalent net interest revenue of $69.7 million reflected an increase of $7.2 million, or 11 percent, from the fourth quarter of 2006. The full year increase was $36.6 million, or 15 percent, compared to 2006. Taxable equivalent net interest margin was 3.73 percent for the fourth quarter, compared with 3.89 percent for the third quarter of 2007 and 3.99 percent for the fourth quarter of 2006. “Our net interest margin continues to be under pressure due to very competitive CD pricing, the higher level of non-performing assets, and a slight change in the mix of earning assets,” stated Tallent. “With the Federal Reserve’s rate cut yesterday and the outlook for the continued easing of rates, we expect to see these margin pressures continue into 2008. If liquidity pressures continue to keep an imbalance on our CD pricing, we expect to see further margin compression in the first quarter.”

The fourth quarter provision for loan losses was $29.5 million, including a $3 million special provision for the Spruce Pine developments in North Carolina. This compared with provisions of $3.7 million in both the fourth quarter of 2006 and third quarter of 2007. Net charge-offs were $31.0 million, including $18 million related to the Spruce Pine loans, compared with $5.2 million for the third quarter and $1.9 million a year ago. Annualized net charge-offs to average

loans, excluding Spruce Pine, was 87 basis points for the fourth quarter compared to 35 basis points for the third quarter and 15 basis points for the fourth quarter of 2006.

“The increase in the fourth quarter provision was due to management’s decision to deal with problem credits assertively,” Tallent said. “In the fourth quarter, we charged down non-performing loans aggressively, enabling us to reduce the level of total non-performing assets below the third quarter level. The higher provision increased our allowance-to-loans ratio to 1.51 percent. We believe that our actions in the fourth quarter better position us to manage what we expect to be a challenging 2008.”

At year-end, non-performing assets totaled $46.3 million, compared with $63.3 million at September 30, 2007 and $13.7 million at December 31, 2006. The remaining balance of fraud-related assets for Spruce Pine was $5.3 million, compared with $23.6 million at September 30, 2007. Excluding Spruce Pine, non-performing assets were $41.0 million at year-end compared with $39.8 million at September 30, 2007 and $13.7 million a year ago and as a percentage of total assets was 50 basis points, 49 basis points, and 19 basis points, respectively. The Spruce Pine non-performing assets, as a percentage of total assets, was six basis points at December 31, 2007 and 28 basis points at September 30, 2007. “We continued negotiations related to Spruce Pine during the fourth quarter and have been in contact with all of the borrowers or their counsel,” commented Tallent. “Even though we charged-off these loans, we will seek full recovery, and in the past 30 days, we have reached settlement with several borrowers.”

“Non-performing assets, until recently, were at very low levels and at the lower end of our historic 20 to 35 basis point range,” Tallent said. “During the past two quarters, excluding the Spruce Pine loans, non-performing assets increased above this range to 50 basis points. Most of the rise was construction-related due to softening in the residential housing market. We continue to see a buildup of lot inventory in the Atlanta region and a standstill in new construction lending. We don’t know the length of this current cycle, but we expect several quarters will pass before we return to our historical range for non-performing assets.”

Fee revenue of $16.1 million for the fourth quarter reflected an increase of $2.9 million, or 22 percent, from $13.2 million for the fourth quarter of 2006. Service charges and fees on deposit accounts of $8.4 million reflected an increase of $1.3 million, or 18 percent, from the fourth quarter of 2006 due to growth in transactions, new accounts and higher ATM and debit card usage. Consulting fees were $2.6 million – up $482,000, or 23 percent, from a year ago – surpassing the record level set last quarter and reflecting strong growth in the advisory services practice. Brokerage fees were up $411,000 to $1.1 million from a year ago due to strong retention rates and additional customers.

“During the fourth quarter, we took an opportunity to lower our funding costs by prepaying higher-rate Federal Home Loan Bank advances,” Tallent said. “The gain from the sale of securities more than offset the charges from the prepayment of the advances.” Other fee revenue of $2.1 million included $727,000 of earnings from bank-owned life insurance assets that were added in the second quarter of 2007.

Operating expenses of $49.3 million reflected an increase of $6.8 million, or 16 percent, from the fourth quarter of 2006. Salaries and employee benefit costs totaled $27.1 million, which was $592,000, or 2 percent, higher than the fourth quarter of 2006. Although acquisitions added approximately $1.5 million, this was more than offset by a reduction in bonus and profit sharing expense of $3.5 million. Occupancy expense increased $650,000 to $3.5 million due to the higher costs of operating additional banking offices. Professional fees increased $535,000 to $1.8 million, reflecting higher fees associated with loan work-outs, foreclosures and corporate initiatives. Other expenses of $8.8 million were $5.1 million higher than a year ago and included $3.7 million of write-downs and related costs on foreclosed properties and higher FDIC insurance premiums of $927,000.

“Our operating efficiency ratio of 57.67 percent for the fourth quarter was at the upper end of our long-term efficiency target range of 56 to 58 percent, primarily due to accelerated write-downs on foreclosed properties,” Tallent said. “Despite these challenges, we continue to maintain disciplined expense controls.”

“In the third quarter, the Board of Directors increased the level of our stock purchase program to three million shares, and we have purchased two million shares through December 2007,” noted Tallent. “Even though we believe our stock price is significantly undervalued, it is important to maintain a strong capital position during this difficult credit environment. At year-end, we continued to maintain strong capital ratios, with all of our regulatory capital ratios above the well-capitalized level and our tangible equity-to-asset ratio at 6.58 percent. To help maintain this, we will wait to evaluate any additional stock purchases until the second half of 2008.

“We remain committed to increasing long-term shareholder value by delivering solid growth in earnings per share, building our franchise and providing superior customer service,” said Tallent. “These are very challenging times for financial institutions, and our outlook for 2008 will be tempered by these challenges. Given the uncertainty and volatility in both the housing market and broader economy, we do not have a clear enough view to provide guidance beyond the first quarter. Based on these assumptions and continued growth in the economy, we expect core annualized loan growth for the quarter to be flat. We expect margin compression to continue, net charge-offs to be $5 million to $7 million, and operating earnings per share to be 34 to 38 cents.”

“We remain focused on the solid business model and guiding principles that have resulted in our past achievements,” Tallent concluded. “We will continue to provide unparalleled customer service in our markets and are optimistic about the stability and long-term growth this will bring.”

Conference Call

United Community Banks will hold a conference call on Wednesday, January 23, 2008, at 11 a.m. ET to discuss the contents of this news release, as well as business highlights for the quarter and the financial outlook for 2008. The telephone number for the conference call is (888) 262-8720 and the pass code is “UCBI.” The conference call will also be available by web cast within the Investor Relations section of the company’s web site at www.ucbi.com.

About United Community Banks, Inc.

Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United Community Banks has assets of $8.2 billion and operates 27 community banks with 111 banking offices located throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. The company specializes in providing personalized community banking services to individuals and small to mid-size businesses. United Community Banks also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United Community Banks common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at the company’s web site at www.ucbi.com.

Safe Harbor

This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of some factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled “Forward-Looking Statements” on page 4 of United Community Banks, Inc.’s annual report filed on Form 10-K with the Securities and Exchange Commission.

(Tables Follow)

UNITED COMMUNITY BANKS, INC.

Financial Highlights

Selected Financial Information

																						Fourth
		2007																2006				Quarter				For the Twelve								YTD
(in thousands, except per share		Fourth				Third				Second				First				Fourth				2007-2006				Months Ended								2007-2006
data; taxable equivalent)		Quarter				Quarter				Quarter				Quarter				Quarter				Change				2007				2006				Change
INCOME SUMMARY
Interest revenue		$	140,768			$	144,884			$	136,237			$	129,028			$	123,463							$	550,917			$	446,695
Interest expense			71,038				73,203				68,270				63,923				60,912								276,434				208,815
Net interest revenue			69,730				71,681				67,967				65,105				62,551				11	%			274,483				237,880				15	%
Provision for loan losses (1)			26,500				3,700				3,700				3,700				3,700								37,600				14,600
Fee revenue			16,100				15,615				16,554				14,382				13,215				22				62,651				49,095				28
Total operating revenue			59,330				83,596				80,821				75,787				72,066				(18	)			299,534				272,375				10
Operating expenses			49,336				48,182				47,702				44,841				42,521				16				190,061				162,070				17
Income before taxes			9,994				35,414				33,119				30,946				29,545				(66	)			109,473				110,305				(1	)
Income taxes			3,960				12,878				12,043				11,601				11,111								40,482				41,490
Net operating income			6,034				22,536				21,076				19,345				18,434				(67	)			68,991				68,815				—
Fraud loss provision, net of tax (1)			1,833				—				9,165				—				—								10,998				—
Net income		$	4,201			$	22,536			$	11,911			$	19,345			$	18,434				(77	)		$	57,993			$	68,815				(16	)
OPERATING PERFORMANCE (1)
Earnings per common share:
Basic		$	.13			$	.47			$	.47			$	.45			$	.45				(71	)		$	1.50			$	1.70				(12	)
Diluted			.13				.46				.46				.44				.44				(70	)			1.48				1.66				(11	)
Return on tangible equity (2)(3)(4)			5.06	%			17.54	%			17.52	%			17.18	%			17.49	%							14.23	%			17.52	%
Return on assets (4)			.29				1.11				1.12				1.11				1.10								.89				1.09
Dividend payout ratio			69.23				19.15				19.15				20.00				17.78								24.00				18.82
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings		$	.09			$	.47			$	.26			$	.45			$	.45				(80	)		$	1.26			$	1.70				(26	)
Diluted earnings			.09				.46				.26				.44				.44				(80	)			1.24				1.66				(25	)
Cash dividends declared			.09				.09				.09				.09				.08				13				.36				.32				13
Book value			17.73				17.53				16.98				14.83				14.37				23				17.73				14.37				23
Tangible book value (3)			10.94				10.82				10.44				11.06				10.57				4				10.94				10.57				4
Key performance ratios:
Return on equity (2)(4)			2.01	%			10.66	%			7.05	%			12.47	%			13.26	%							7.79	%			13.28	%
Return on assets (4)			.20				1.11				.64				1.11				1.10								.75				1.09
Net interest margin (4)			3.73				3.89				3.94				3.99				3.99								3.88				4.05
Efficiency ratio			57.67				55.34				56.59				56.56				55.93								56.53				56.22
Dividend payout ratio			100.00				19.15				34.62				20.00				17.78								28.57				18.82
Equity to assets			10.20				10.32				8.94				8.80				8.21								9.61				8.06
Tangible equity to assets (3)			6.58				6.65				6.65				6.66				6.46								6.63				6.32
ASSET QUALITY
Allowance for loan losses		$	89,423			$	90,935			$	92,471			$	68,804			$	66,566							$	89,423			$	66,566
Non-performing assets			46,258				63,337				43,601				14,290				13,654								46,258				13,654
Net charge-offs			31,012				5,236				2,124				1,462				1,930								39,834				5,524
Allowance for loan losses to loans			1.51	%			1.53	%			1.54	%			1.27	%			1.24	%							1.51	%			1.24	%
Non-performing assets to total assets			.56				.77				.54				.20				.19								.56				.19
Net charge-offs to average loans (4)			2.07				.35				.15				.11				.15								.69				.12
AVERAGE BALANCES
Loans		$	5,940,230			$	5,966,933			$	5,619,950			$	5,402,860			$	5,134,721				16			$	5,734,608			$	4,800,981				19
Investment securities			1,404,796				1,308,192				1,242,448				1,153,208				1,059,125				33				1,277,935				1,041,897				23
Earning assets			7,424,992				7,332,492				6,915,134				6,599,035				6,225,943				19				7,070,900				5,877,483				20
Total assets			8,210,120				8,083,739				7,519,392				7,092,710				6,669,950				23				7,730,530				6,287,148				23
Deposits			6,151,476				6,246,319				5,945,633				5,764,426				5,517,696				11				6,028,625				5,017,435				20
Shareholders’ equity			837,195				834,094				672,348				624,100				547,419				53				742,771				506,946				47
Common shares - basic			47,203				48,348				44,949				43,000				41,096								45,893				40,393
Common shares - diluted			47,652				48,977				45,761				43,912				42,311								46,593				41,575
AT PERIOD END
Loans		$	5,929,263			$	5,952,749			$	5,999,093			$	5,402,198			$	5,376,538				10			$	5,929,263			$	5,376,538				10
Investment securities			1,356,846				1,296,826				1,213,659				1,150,424				1,107,153				23				1,356,846				1,107,153				23
Total assets			8,207,302				8,180,600				8,087,667				7,186,602				7,101,249				16				8,207,302				7,101,249				16
Deposits			6,075,951				6,154,308				6,361,269				5,841,687				5,772,886				5				6,075,951				5,772,886				5
Shareholders’ equity			831,902				833,761				828,731				638,456				616,767				35				831,902				616,767				35
Common shares outstanding			46,903				47,542				48,781				43,038				42,891								46,903				42,891

UNITED COMMUNITY BANKS, INC.
Selected Financial Information
For the Years Ended December 31,

(in thousands, except per share data;																										5 Year
taxable equivalent)		2007				2006				2005				2004				2003				2002				CAGR(4)
INCOME SUMMARY
Interest revenue		$	550,917			$	446,695			$	324,225			$	227,792			$	198,689			$	185,498
Interest expense			276,434				208,815				127,426				74,794				70,600				76,357
Net interest revenue			274,483				237,880				196,799				152,998				128,089				109,141				20	%
Provision for loan losses			37,600				14,600				12,100				7,600				6,300				6,900
Fee revenue			62,651				49,095				46,148				39,539				38,184				30,734				15
Total revenue			299,534				272,375				230,847				184,937				159,973				132,975				18
Operating expenses (1)			190,061				162,070				140,808				110,974				97,251				80,690				19
Income before taxes			109,473				110,305				90,039				73,963				62,722				52,285				16
Income taxes			40,482				41,490				33,297				26,807				23,247				19,505
Net operating income			68,991				68,815				56,742				47,156				39,475				32,780				16
Fraud loss provision, net of tax			10,998				—				—				—				—				—
Merger-related charges, net of tax			—				—				—				565				1,357				—
Net income		$	57,993			$	68,815			$	56,742			$	46,591			$	38,118			$	32,780				12
OPERATING PERFORMANCE (1)
Earnings per common share:
Basic		$	1.50			$	1.70			$	1.47			$	1.31			$	1.15			$	1.02				8
Diluted			1.48				1.66				1.43				1.27				1.12				.99				8
Return on tangible equity (2)(3)			14.23	%			17.52	%			18.99	%			19.74	%			19.24	%			17.88	%
Return on assets			.89				1.09				1.04				1.07				1.06				1.11
Efficiency ratio			56.53				56.35				57.77				57.65				58.39				57.72
Dividend payout ratio			24.00				18.82				19.05				18.32				17.39				16.34
GAAP PERFORMANCE
Per common share:
Basic earnings		$	1.26			$	1.70			$	1.47			$	1.29			$	1.11			$	1.02				4
Diluted earnings			1.24				1.66				1.43				1.25				1.08				.99				5
Cash dividends declared (rounded)			.36				.32				.28				.24				.20				.17				17
Book value			17.73				14.37				11.80				10.39				8.47				6.89				21
Tangible book value (3)			10.94				10.57				8.94				7.34				6.52				6.49				11
Key performance ratios:
Return on equity (2)			7.79	%			13.28	%			13.46	%			14.39	%			14.79	%			16.54	%
Return on assets			.75				1.09				1.04				1.05				1.02				1.11
Net interest margin			3.88				4.05				3.85				3.71				3.68				3.95
Dividend payout ratio			28.57				18.82				19.05				18.60				18.02				16.34
Equity to assets			9.61				8.06				7.63				7.45				7.21				7.01
Tangible equity to assets (3)			6.63				6.32				5.64				5.78				6.02				6.60
ASSET QUALITY
Allowance for loan losses		$	89,423			$	66,566			$	53,595			$	47,196			$	38,655			$	30,914
Non-performing assets			46,258				13,654				12,995				8,725				7,589				8,019
Net charge-offs			39,834				5,524				5,701				3,617				4,097				3,111
Allowance for loan losses to loans			1.51	%			1.24	%			1.22	%			1.26	%			1.28	%			1.30	%
Non-performing assets to total assets			.56				.19				.22				.17				.19				.25
Net charge-offs to average loans			.69				.12				.14				.11				.15				.14
AVERAGE BALANCES
Loans		$	5,734,608			$	4,800,981			$	4,061,091			$	3,322,916			$	2,753,451			$	2,239,875				21
Investment securities			1,277,935				1,041,897				989,201				734,577				667,211				464,468				22
Earning assets			7,070,900				5,877,483				5,109,053				4,119,327				3,476,030				2,761,265				21
Total assets			7,730,530				6,287,148				5,472,200				4,416,835				3,721,284				2,959,295				21
Deposits			6,028,625				5,017,435				4,003,084				3,247,612				2,743,087				2,311,717				21
Shareholders’ equity			742,771				506,946				417,309				329,225				268,446				207,312				29
Common shares — Basic			45,893				40,393				38,477				36,071				34,132				32,062
Common shares — Diluted			46,593				41,575				39,721				37,273				35,252				33,241
AT YEAR END
Loans		$	5,929,263			$	5,376,538			$	4,398,286			$	3,734,905			$	3,015,997			$	2,381,798				20
Investment securities			1,356,846				1,107,153				990,687				879,978				659,891				559,390				19
Total assets			8,207,302				7,101,249				5,865,756				5,087,702				4,068,834				3,211,344				21
Deposits			6,075,951				5,772,886				4,477,600				3,680,516				2,857,449				2,385,239				21
Shareholders’ equity			831,902				616,767				472,686				397,088				299,373				221,579				30
Common shares outstanding			46,903				42,891				40,020				38,168				35,289				31,895				8

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End

																						Linked
																						Quarter
		2007																2006				Change(2)				Year over Year Change
		Fourth				Third				Second				First				Fourth												Excluding
(in millions)		Quarter				Quarter				Quarter(1)				Quarter				Quarter				Actual				Actual				Acquired
LOANS BY CATEGORY
Commercial (sec. by RE)		$	1,476			$	1,441			$	1,461			$	1,227			$	1,230				10	%			20	%			3	%
Commercial construction			527				527				509				462				470				—				12				7
Commercial & industrial			418				408				421				315				296				10				41				4
Total commercial			2,421				2,376				2,391				2,004				1,996				8				21				4
Residential construction			1,829				1,939				2,013				1,874				1,864				(23	)			(2	)			(11	)
Residential mortgage			1,502				1,459				1,413				1,353				1,338				12				12				11
Consumer / installment			177				179				182				171				179				(4	)			(1	)			(6	)
Total loans		$	5,929			$	5,953			$	5,999			$	5,402			$	5,377				(2	)			10				—
LOANS BY MARKET
Atlanta Region		$	2,402			$	2,451			$	2,518			$	2,015			$	2,005				(8)	%			20	%			(7)	%
North Georgia			2,060				2,026				2,032				2,010				2,034				7				1				1
Western North Carolina			806				834				816				782				773				(13	)			4				4
Coastal Georgia			415				402				396				372				358				13				16				16
East Tennessee			246				240				237				223				207				10				19				19
Total loans		$	5,929			$	5,953			$	5,999			$	5,402			$	5,377				(2	)			10				—
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development		$	592			$	596			$	602			$	580			$	579				(3)	%			2	%			(6)	%
Land loans			126				125				113				122				127				3				(1	)			(3	)
Lot loans			407				403				393				362				364				4				12				5
Total			1,125				1,124				1,108				1,064				1,070				—				5				(2	)
House loans
Spec			473				539				596				533				516				(49	)			(8	)			(21	)
Sold			231				276				309				277				278				(65	)			(17	)			(28	)
Total			704				815				905				810				794				(54	)			(11	)			(23	)
Total residential construction		$	1,829			$	1,939			$	2,013			$	1,874			$	1,864				(23	)			(2	)			(11	)
RESIDENTIAL CONSTRUCTION — ATLANTA REGION
Dirt loans
Acquisition & development		$	311			$	312			$	336			$	317			$	321				(1)	%			(3)	%			(18)	%
Land loans			54				53				50				52				57				8				(5	)			(11	)
Lot loans			131				135				140				113				109				(12	)			20				(3	)
Total			496				500				526				482				487				(3	)			2				(14	)
House loans
Spec			286				328				378				298				297				(51	)			(4	)			(25	)
Sold			82				112				140				124				117				(107	)			(30	)			(57	)
Total			368				440				518				422				414				(65	)			(11	)			(34	)
Total residential construction		$	864			$	940			$	1,044			$	904			$	901				(32	)			(4	)			(23	)

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Year-End

(in millions)		2007				2006				2005				2004				2003
LOANS BY CATEGORY
Commercial (sec. by RE)		$	1,476			$	1,230			$	1,055			$	966			$	777
Commercial construction			527				470				358				239				164
Commercial & industrial			418				296				237				212				190
Total commercial			2,421				1,996				1,650				1,417				1,131
Residential construction			1,829				1,864				1,381				1,066				763
Residential mortgage			1,502				1,338				1,206				1,102				982
Consumer / installment			177				179				161				150				140
Total loans		$	5,929			$	5,377			$	4,398			$	3,735			$	3,016
LOANS BY MARKET
Atlanta Region		$	2,402			$	2,005			$	1,456			$	1,061			$	662
North Georgia			2,060				2,034				1,790				1,627				1,481
Western North Carolina			806				773				668				633				548
Coastal Georgia			415				358				306				274				222
East Tennessee			246				207				178				140				103
Total loans		$	5,929			$	5,377			$	4,398			$	3,735			$	3,016